DEQ says Hecla Mining Company, CEO violating act State has 'misinterpreted the statute,' says company official

The Montana Department of Environmental Quality on Tuesday notified Hecla Mining Company and its CEO that they are in violation of Montana’s Metal Mine Reclamation Act and have 30 days to provide a notice of intent to comply, a DEQ news release states.

The decision follows a request a handful of conservation groups made late last October for the DEQ to suspend state permits for the two mines — Montanore and Rock Creek — Hecla Mining Company has proposed near Libby and Noxon.

The group asked the DEQ to enforce the act’s “bad actor” provision, arguing that Hecla is led by a former top official of Pegasus Gold Incorporated, whose Zortman-Landusky, Basin Creek and Beal Mountain mines polluted the environment, threatening fish and contaminating sacred Native American sites.

The former top Pegasus Gold official is Phillips S. Baker, Hecla’s president and CEO. He served as vice president and chief financial officer in his prior position.

“Montana’s ‘bad actor’ provision of the Metal Mine Reclamation Act prohibits a person from conducting mining or exploration activities in Montana if that person was a principal or controlling member of a business entity for which DEQ received bond proceeds,” explains a statement from the DEQ attributed to Director Tom Livers and provided to The Western News. “(Pegasus Gold’s) failure to reclaim the sites triggered the release of bond proceeds. Baker was a principal of Pegasus and he is now conducting exploration and mining in Montana in his position with Hecla. Thus, Baker is in violation of the Metal Mine Reclamation Act.”

Hecla may also face enforcement action, according to Livers’ statement, “for authorizing a violation of the Metal Mine Reclamation Act” by employing Baker “to further its mining and exploration activities in Montana knowing his previous positions at Pegasus.”

Livers’ statement also contends that the state has spent “additional tens of millions of public funds” to cover the reclamation costs at the three former Pegasus Gold sites.

Ongoing reclamation costs “are costing the state approximately two million dollars per year in perpetuity,” according to the DEQ news release.

A news release issued Tuesday by Earthjustice, the law firm representing the groups that petitioned the DEQ last October, states that “public agencies had spent more than $74 million for water treatment at Zortman-Landusky alone” as of January 2017.

The petitioners include the Clark Fork Coalition, Earthworks, Montana Environmental Information Center, Rock Creek Alliance and Save Our Cabinets.

Pegasus eventually filed for bankruptcy, the very case that prompted the Montana legislature in 2001 to add the “bad actor” provision to the Metal Mine Reclamation Act.

According to the DEQ, Hecla and Baker can do one of two things to comply with the act — pay all necessary costs the DEQ incurs in reclaiming the Zortman-Landusky, Basin Creek and Beal Mountain Mine Sites, or “demonstrate that Baker is no longer mining or conducting exploration activities in Montana.”

“We strongly disagree with the state’s decision,” Luke Russell, Hecla’s vice president of external affairs, told The Western News on Tuesday. “We believe they have misinterpreted the statute and we’re going to defend the company aggressively to challenge this decision.”

Russell said that the provision is “very clear” in its application to legal entities, not individuals.

“Mr. Baker was not the legal entity involved with Pegasus, he’s not the legal entity with Montanore or Rock Creek, and so (the provision) does not apply,” Russell said.

“DEQ got it right on the law and did the right thing for Montana by acting to enforce the state’s bad actor law against Hecla and its CEO,” Earthjustice attorney Katherine O’Brien said Wednesday via email. “Holding individuals like Baker accountable when the companies they lead run out on their cleanup bill is exactly what the bad actor law is designed to do.”

Russell said he suspected “it won’t take us (30 days) to challenge the decision.”